This report is an overview of the management of risk due to livestock diseases, a potentially catastrophic type of risk that can have strong external effects given its links to the food chain and to human health. Animal disease, primarily in farmed livestock, has long been a policy concern for food safety reasons and the high economic losses it can engender. The globalisation of trade and human movement, and sensitivities to food safety, enhance the relevance and complexity of disease control for terrestrial livestock. Outbreaks – or even rumours of an outbreak – can result in widespread consumer alarm, disruption of trade, and severe effects on incomes, not to mention the human cost of illnesses and deaths arising from animal disease.

This report is an overview of the management of risk due to livestock diseases, a potentially catastrophic type of risk that can have strong external effects given its links to the food chain and to human health. Animal disease, primarily in farmed livestock, has long been a policy concern for food safety reasons and the high economic losses it can engender. The globalisation of trade and human movement, and sensitivities to food safety, enhance the relevance and complexity of disease control for terrestrial livestock. Outbreaks – or even rumours of an outbreak – can result in widespread consumer alarm, disruption of trade, and severe effects on incomes, not to mention the human cost of illnesses and deaths arising from animal disease.

Governments are increasingly acting to prevent and control livestock diseases that can cause major harm to human health (zoonoses) and/or to economic enterprises through their effects on income, trade and third parties. Policies in this area can be pursued in a number of ways. These include regulations and advisory/education systems, and compensation schemes to incentivise producers, veterinarians and others to take appropriate actions. However, in order to ensure efficiency, the nature and financing of these prevention, control and compensation schemes need to be carefully considered, given the need to involve a variety of stakeholders in both design and implementation.

This chapter concerns the management of livestock diseases liable to become epidemic or even pandemic, i.e. that can spread from an endemic disease source to a wider population within the country, or even beyond. The consequences of such outbreaks may concern not only the affected livestock species, but also the trade of livestock or their products both at the domestic (regional or national) and international levels, human health in the case of zoonoses, and other economic sectors. Outbreaks of animal disease have a number of economic impacts that range from direct losses for livestock producers to "third-party" effects. Standard cost-benefit analyses offer some economic guidance, but are complicated by issues of risk and uncertainty, and the prevalence of "club good" and "public good" characteristics of contagious livestock diseases. International organisations and agreements, such as the OIE, the European Union and Mercosur, play an important role in informing, guiding and co-ordinating national policy designs and actions in the presence of livestock disease, e.g. via maintaining databases, setting standards and providing negotiation forums.

National systems to prevent and control the spread of animal disease must take into account a number of factors, including the epidemiological history, socio-political culture, and the risks and likely severity of disease outbreaks. The efficiency of these systems is determined by where and by whom decision-making takes place, and how management responsibilities are implemented. In the five countries studied (Australia, Botswana, Brazil, Canada, and France), data for risk assessment is gathered in several ways, with varied levels of information integration and sharing. Major decision-making is generally in the hands of the centralised state Veterinary Services, taking account of the views and interests of stakeholders. Successful implementation of animal health policy depends on the availability of adequately trained and equipped veterinary field staff and others, along with accepted and transparent roles and co-financing arrangements. The experiences of Australia and Canada offer interesting models of private-public partnerships, while France’s GDS system involves all farmers in animal health programmes. Different strategies are possible to organise private contributions through direct fees or levies collected at several steps of the food chain, but governments must assure all partners of their commitment to support some of the initial costs if an important animal disease emerges.

Compensation schemes for animal disease losses provide incentives for individual and aggregate good-practice biosecurity, and provide an income safety net for livestock keepers. However, such schemes can be costly, and involve "moral hazard" if not carefully administered. The five country compensation schemes examined in this chapter (Australia, Canada, Germany, the Netherlands and Viet Nam) share several key features, such as timely reporting requirements to avoid paying penalties, reliance on market value (or a percentage of it) as the basis for assessing indemnification for loss of animals, and not compensating consequential losses. Cost-sharing arrangements, however, diverge: the Australian and German governments always pay a portion of outbreak control costs, while in the Netherlands these costs are covered entirely by the livestock industry up to the negotiated contribution ceilings. Publicly-funded schemes also differ: the Canadian compensation scheme is entirely funded by the federal budget, while in Viet Nam both the central government and provincial funds participate. Contribution amounts vary, with Australia’s probably providing the highest effective level of compensation, and Viet Nam, with a compensation rate of 70% of market value, the lowest observed rate. There would appear to be considerable scope for variants of animal disease compensation schemes, tailored to specific industry/disease situations, which can both reward and promote good disease risk management practices, and appropriately share costs across producers and between producers and government.

This chapter describes important features of the animal disease management system in Australia. The first section focuses on prevention and control systems and covers the assessment of risks, the consultation and decision-making process, the design and implementation of animal health programmes, and the management of outbreaks. The second section analyses compensation schemes and the system of incentives, including institutions, compensation practices, financial structures, and incentives for notification and prevention. The concluding table summarise the main characteristics and challenges.

This chapter describes important features of the animal disease management system in Botswana. The first section focuses on prevention and control systems and covers the assessment of risks, the consultation and decision-making process, the design and implementation of animal health programmes, and the management of outbreaks. The concluding remarks summarise the main characteristics and challenges.

This chapter describes important features of the animal disease management system in Brazil. The first section focuses on prevention and control systems and covers the assessment of risks, the consultation and decision-making process, the design and implementation of animal health programmes, and the management of outbreaks. The concluding remarks summarise the main characteristics and challenges.

This chapter describes important features of the animal disease management system in Canada. The first section focuses on prevention and control systems and covers the assessment of risks, the consultation and decision-making process, the design and implementation of animal health programmes, and the management of outbreaks. The second section analyses compensation schemes and the system of incentives, including institutions, compensation practices, financial structures, and incentives for notification and prevention. The concluding table summarise the main characteristics and challenges.

This chapter describes important features of the animal disease management system in France. The first section focuses on prevention and control systems and covers the assessment of risks, the consultation and decision-making process, the design and implementation of animal health programmes, and the management of outbreaks. The concluding remarks summarise the main characteristics and challenges.

This chapter describes important features of the animal disease management system in Germany. The first section focuses on prevention and control systems and covers the assessment of risks, the consultation and decision-making process, the design and implementation of animal health programmes, and the management of outbreaks. The second section analyses compensation schemes and the system of incentives, including institutions, compensation practices, financial structures, and incentives for notification and prevention. The concluding table summarises the main characteristics and challenges.

This chapter describes important features of the animal disease management system in the Netherlands. The first section focuses on prevention and control systems and covers the assessment of risks, the consultation and decision-making process, the design and implementation of animal health programmes, and the management of outbreaks. The second section analyses compensation schemes and the system of incentives, including institutions, compensation practices, financial structures, and incentives for notification and prevention. The concluding table summarises the main characteristics and challenges.

This chapter describes important features of the animal disease management system in Viet Nam. The first section focuses on prevention and control systems and covers the assessment of risks, the consultation and decision-making process, the design and implementation of animal health programmes, and the management of outbreaks. The second section analyses compensation schemes and the system of incentives, including institutions, compensation practices, financial structures, and incentives for notification and prevention. The concluding table summarises the main characteristics and challenges.